Tipping the balance in your favour

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After a summer of spending, many of us may feel a slight twinge of anxiety on opening our credit card bills.

There are times when our finances are stretched, meaning that there is little alternative to turning to our plastic companions.

However, in today's market where lenders are battling one another for customers, there is no need for high rates of interest on our debts.

The balance transfer arena has expanded rapidly over the past few years, giving spenders the opportunity to move their balances around.

The 0% balance transfer card has become hugely popular; little surprise given the significant benefits on offer.

And, with such competition in the marketplace, lenders are offering 0% periods that can run for up to 16 months.

The 0% balance transfer credit card works by offering a period in which no interest is charged on the balance carried over from another card, giving holders valuable time to clear their debt without accruing any additional interest.

It's a transfer deal that the most highly decorated football manager would be proud of.

For example, if a person had racked up debts of £7,000 on their credit or store cards, they would be able to clear it by paying £437.50 a month for 16 months.

With no interest charged in that time, the savings can run into hundreds of pounds.

An effective way of making sure you pay off your balance is by setting up a direct debit for the amount you need to pay each month that comes out of your bank at a time you know the funds will be available, perhaps just after pay day?

It is important that you make payments on time each month, as failure to do so will probably result in the valuable 0% element of the card being withdrawn, leaving you back where you started.

If your debt is rather larger than you would like, giving yourself the most time to pay it off, or at least down, could be the most sensible option.

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